Two Decades Of Investigation And Prosecution Leads To Informal Admonition
The District of Columbia Court of Appeals has resolved a matter with as tortured a history as any in the long and tortured history of the bar disciplinary system.
As explained below, one Division member agrees with the Board majority that misappropriation was not proven in this case. A majority of the Division concludes that facts satisfying the elements of misappropriation were proven by clear and convincing evidence, but that the Division’s interpretation as to whether there was “entrustment” of the estate-account funds and use of the funds “without authorization” should apply only prospectively. Accordingly, the Division declines to impose a sanction on respondent for misappropriation. The Division is also unanimous in accepting the recommended sanction of an informal admonition for respondent’s record-keeping violation.
The charges involved fee payments from an estate account in 1995, 1996 and 1999. The client approved the payments but required court approval was not obtained .
Between 1994 and 2002, respondent Quinne Harris-Lindsey was the required second signatory for withdrawals from a guardianship-estate account. The other required signatory was the court-appointed guardian of the estate account, who was respondent’s cousin and client. The record in this case establishes that on three occasions in 1995, 1996, and 1999, with the client’s consent, respondent authorized withdrawals from the account to pay her fees for the representation, and did so without prior court approval. The primary issue before us is whether respondent thereby misappropriated estate account funds.
Bar Counsel opened the investigation in 2002 – a mere eighteen years ago. An attempt to resolve the matter by negotiated discipline of a functional six-month suspension was rejected in the 2009 – 2011 time frame.
Charges were then filed leading to a hearing committee recommendation of disbarment (see our prior coverage here)
The BPR rejected the finding of misappropriation and by a plurality proposed an informal admonition (see our prior coverage here)
The issue involved the element of “entrustment” in a situation where the account has joint signatories.
As noted above, the attorney was not a probate lawyer and was helping her cousin in the matter
In short, there is not clear and convincing evidence that Ms. Fulwood gave respondent authority over the estate-account funds with confidence that respondent would keep the funds as safe as they would be if Ms. Fulwood alone had access to them.
The court here created new law but for prospective purposes
since this opinion announces for the first time what it means for client or third party funds to be “entrusted” to a lawyer and expands our application of the term “unauthorized use” for purposes of determining whether funds have been misappropriated, the Division unanimously concludes that the holding in this case, concluding that there was misappropriation on the facts presented, should be prospective only.
Thus a case that involved 20th Century allegations ends with a precedential whimper
Though we decline to sanction respondent for misappropriation, we reiterate what we stated above: that a lawyer is “entrusted” with client or third party funds when she is imbued with authority to prevent their unauthorized use, and that “unauthorized use” of funds can be established by proving either that the client did not consent to the attorney’s use of the funds or that the funds or assets were accessed without required prior approval by a court. If a lawyer fails to exercise her authority to prevent the unauthorized use of client or third-party funds, a finding of misappropriation may lie.
Associate Judges Glickman and Beckwith found misappropriation but otherwise concurred with the lead opinion of Associate Judge Thompson. (Mike Frisch)